China Covid woes spur risk aversion.
“No end in sight for coronavirus infection in Beijing – said locals.”
Beijing local government began to shut down public transport and extended restrictions on public venue last Wednesday. The effort was taken to contain coronavirus infections while at the same time, avoiding the same fate bestowed upon Shanghai – lockdown which lasted more than a month. Dozens of new cases pop up each day, in which the local government hoped mass testing and contact tracing would help to minimize its spread further into the community. All eyes remain fixated upon China’s next move as the economic powerhouse is known to introduce harsh measures to uphold their “zero covid policy”. Fears among investors jeopardized the demand for antipodeans, countries that heavily reply on China in terms of commodity exports.
Quick recap on NZDUSD
The pair whipsawed in the past few trading sessions, indicating uncertainty in terms of sentiment among investors.
NZDUSD Weekly Technical Analysis
NZDUSD plunged into the abyss after losing its ground near 0.6539. For the time being, the pair seems to be supported by its psychological level near 0.6400.
NZDUSD Daily Technical Analysis
The outlook on the daily chart seems rather mixed as the pair has continued to trade within a small range for the past few days.
Trading Idea
ORDER: SELL LIMIT
ENTRY: 0.6560
STOP LOSS: 0.6700
Target 1: 0.6400
Target 2: 0.6300
ZFX Analyst’s Comment
Traders will keep an eye on China’s next move as the coronavirus spread rapidly in the region. As opportunity costs rise each day, market sentiment may shift towards other assets which may have more probable returns such as the US dollar. However, we do have to take note of Nonfarm Payrolls report later in the day which may kneejerk the pair in the short-term.
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